Nexen moots Yemen pullout

Garnet Roach

SANA’A. Nov. 2 — Nexen Calgary, the largest oil firm currently operating in Yemen, may be forced to make an “orderly exit” if violence and uncertainty persist, putting more than 1,000 jobs at risk.

The Canadian company has been operating in Yemen since the 1980s and, according to Pierre R. Alvarez, vice president of corporate relations, currently employs more than 1,100 people, “92 percent of whom are Yemeni”.

The company has a December 17 deadline to renew its contract with the Yemeni government, but political unrest and ongoing violence has hindered negotiations.

“The political situation is making it difficult to make visible progress on an extension,” Kevin Reinhart, Nexen´s chief financial officer, reportedly said in a conference call with analysts last Thursday.

“While we continue our efforts, we are preparing for an orderly exit if these efforts prove unsuccessful,” he added.

However, a spokesman from the company in Yemen said that only one of Nexen’s contracts was up for renewal, though he admitted that this was the largest of its projects in the country, producing 38 percent of its oil.

Nexen currently produces 56,000 boe/d (barrels of oil equivalent per day) before royalties in Yemen. The contract on Block 51, which produces around 6,000 boe/d, expires in 2023.

Nexen also offers a number of scholarships and internships, offering English language training to Yemenis as well as study programs in Canada.

Alvarez assured the Yemen Times that even if Nexen was forced to pull out of Yemen, it would honor its commitments up to the end of each program.

“We have brought 130 Yemeni students to Canada for post-secondary education through our Yemen Scholarship Program.

We are currently sponsoring 39 students at various stages of their post-secondary programs at the University of Calgary, SAIT Polytechnic and Mount Royal University,” he said.

“Nexen is also sponsoring 11 students in Yemen selected in previous years that are in the process of completing their English-language training. We are committed to funding these students through to the completion of their programs.” ﻿